Revenue from UK 4G sale lower than expected

The British government will receive a smaller-than-expected £2.34 billion pound (€2.7 billion) windfall from airwaves auctioned for 4G super fast mobile broadband, in a sale where all existing mobile operators won spectrum.

The Treasury had pencilled in proceeds of £3.5 billion from the sell-off, although the total will rise slightly after a final stage of bidding to allocate the winners' bands of airwaves.

Mobile operators Vodafone, O2, EE and Three all successfully bid, as did fixed-line operator BT, regulator Ofcom said. The regulator structured the auction to deliver maximum benefits for businesses and consumers rather than maximise revenue for the government.

Ofcom chief executive Ed Richards said: "This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country".

Vodafone, the country's third ranking operator, paid the most, some £790.8 million to win a five blocks of airwaves, Ofcom said.

The biggest operator EE, which has already launched 4G services in major British cities using its existing airwaves, paid £588.9 million to buy more to extend coverage countrywide, Ofcom said, while O2, owned by Telefonica, paid £550 million for two tranches.

Ofcom reserved airwaves for a fourth operator in order to keep the market competitive. Hutchison 3G, the operator of fourth-placed Three, paid £225 million to win the bands, Ofcom said.

BT bid £186.5 million to pick up three blocks of spectrum. It said it would use the licenses to provide its customers with better mobile broadband, but it would not build a national mobile network.

There is a final stage in the process to determine where in the 800 MHz and 2.6 GHz bands each winning bidder's new spectrum will be located, for which bidding will take place shortly, it said.

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